The Federal Council on the Arts and the Humanities, which coordinates national arts policies, yesterday held its last meeting of the Carter administration. Though established long ago by action of the Congress, it was inactive until Joan Mondale was named its honorary chairperson. Yesterday she was told that:

Before he leaves for Plains, the president intends to sign an "Executive Order on Design" that will establish an Annual Presidential Design Awards Program to reward the best designers employed by the government. "Each federal dollar spent on design," the order states, "shall be viewed as an investment in enriching the quality of American life. . ."

The president today will ask the Congress to increase the present $12.9-million annual budget of the Institute for Museum Services by $4 million. The institute intends to spend $4.8 million on "general operating support grants" to major American museums. There is a $300,000 limit on the three-year grants. A museum might receive $125,000 during the first year. It would have to match that with new monies raised from other sources. The next year it would get as much as $100,000 -- which it would have to match with $200,000 of its own. The third year's grant -- of $75,000 -- would have to be matched on a 3-to-1 basis.

In fiscal year 1979 the Council's Arts and Artifacts Indemnity program, which protects the art in shows borrowed from abroad, saved museums in this country more than $3 million in insurance premiums. The council learned, however, that the program soon may have to pay its first insurance claim -- for a Picasso painting, "Portrait of a Painter After El Greco," which was pierced by a screw-eye after its display at the Picasso retrospective at the Museum of Modern Art. Though it will cost only $400 to restore the $645,000 picture, the fact that it's been damaged may have diminished its market value. If so, the council may have to pay its owner, Siegfried Rosengard, a Swiss dealer, between $34,000 and $62,000. He has yet to file a claim.

HUD's Urban Development Action Grants have been used in recent years to renovate the Grand Opera House in Galveston, Tex., rebuild a theater in Dowagiac, Mich., acquire the land for a new art museum in Seattle, add a wing to the Portland (Maine) Museum of Art and support other cultural institutions.

The Department of Labor now recognizes artists as workers. "That idea was first suggested four years ago at my luncheon table," said Mondale. "When I heard it was official, I wanted to stand up and cheer."